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About In House Tax

This weblog is a news and views site for tax professionals within the UK and international in-house tax community.  You will find information about appointments and people moves in and around the in-house tax market, issues affecting the in-house tax professional, opinions on the state of the tax job market, updates on tax technology, and other general thoughts of the day.

Hope you find it useful.

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Location: St Albans, United Kingdom

This site has been developed by Simon Godley, who also runs the niche tax recruitment company Talentpool Selection . Simon spends a lot of his time placing tax specialists into FTSE companies, large in-bound groups and some professional services organisations. He also recruits and is well networked around the UK tax technology and VAT markets.

Tax News

Tax Jobs - How recession proof?

Tuesday, 18 March 2008

I subscribe to a few e-mail newsletters from various sources, one of which is The Motley Fool. They send through loads of information, opinions and recommendations about financial services products, and it's all quite good, honest, independent stuff.

Recently they sent through a brief article on which job sectors tend to be most recession proof. According to them, retail, consumer product manufacture, travel and hospitality businesses are usually hardest hit in a recession as people spend less on luxuries and leisure. Meanwhile vital industries such as health care and energy tend to weather the storm far better.

They also reveal that the Top 10 recession proof jobs in the UK are:

IT security professional
Project manager
Software tester
Computer programmer/developer
Network engineer
Business analyst
Pharmaceutical/medical sales
Child care worker
Web designer
Viral marketing professional

So it got me thinking how recession proof are tax jobs? Obviously, tax didn't make it into the top 10 of the above survey.

One argument is that surely we always need tax people, irrespective of how well the economy is doing? How does that saying go - there's nothing more certain in life than death and taxes? Having worked in tax recruitment during the last slump (2001 - 2003), I can safely say that this is not the case during a recession. The tax departments of the Big Four were heavily cut down, through 2 or 3 rounds of redundancies. Redundancies started off as voluntary in 2001, where people could opt to have their roles redundant, then in 2002 it got worse and sizeable numbers (into the 100s) of Big Four tax people were simply had to leave. I seem to remember that the most vulnerable seemed to be Tax Partners that were not big billers, and Senior Managers who were not going to achieve promotion to Partner. People in ACA / CTA training contracts were safe.

In-house tax teams of corporates and banks were not as badly affected, and in comparison, were relatively safe. With the exception of tax specialists working for companies in the high-tech sector or anything remotely like a dot com business. They were not safe, as it was those companies (and speculative high risk companies like Enron) which led us to the disaster in the first place.

So why the safety difference between Big Four/practice, and industry? This is because Big Four firms always (without exception) over-recruit during the good times - there is a 'war for talent' in the market and they look to seize all good tax candidates that are made available to them. If it is a bull market, herd like behaviour follows across the Big Four.

Commerce/Industry can't do this - a company can only recruit tax professionals for very specific roles, and has to go through a number of layers of approval before a recruitment process starts, so the hiring is much more controlled. Then when the downturn comes, if that company is particularly exposed in that downturn, then tax jobs may be at risk, otherwise they will be fairly safe.

I'm not going to make any predictions, but if I still worked in tax today, and given the looming financial problems, I would possibly prefer to be a Head of Tax for an energy or pharma company rather than a Senior Manager in a financial services tax team of a Big Four.

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posted by Simon Godley


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